Last year, the largest bank in the United States, JPMorgan Chase & Co. found itself in dilemma because one of its traders know as the London Whale lost more than $6.2 billion for the bank. Compared to a record profit of $21.3 billion earned by the bank, the money lost seemed to have little impact. However, the London Whale indeed gained JPMorgan much more pain simply because executives made a series of inaccurate statements including mocking up portfolios to cover reported losses, misleading regulators, and disregarding the shareholders’ profits.

Such actions were considered irresponsibility in business ethic. For a bank like JPMorgan Chase & Co., such poorly executed actions not only caused the bank to pay a huge amount of fines, but also induced the bank to face the criminal probes and the lost of reputation. It’s true that every bank wants to maximize its profits. However, an executive working in the Chief Investment Office has the responsibility to hold down the bank’s risk level and to be authentic to the public. Freeman’s Stakeholder Theory has pointed out that a good manager is someone who makes profits for every stakeholder in the society, referencing the government, the regulators and consumers in this situation. Ignoring and violating laws for the sake of maximizing profits should never happen again in such nationally trusted bank, JPMorgan Chase & Co.

References:

Protess, Ben, and Jessica Silver-Greenburg. “JPMorgan Expected to Admit Fault in ‘London Whale’ Trading Loss.” DealBook JPMorgan Expected to Admit Fault in London Whale Trading Loss Comments. The New York Times, 15 Oct. 2013. Web. 10 Sept. 2014. <http://dealbook.nytimes.com/2013/10/15/jpmorgan-said-to-reach-deal-with-trading-regulator/>.

Image: <http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2012/7/14/1342255833984/David-Simonds-London-Whal-009.jpg>